STMicroelectronics Announces Status of Common Share Repurchase Program
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Insights
STMicroelectronics' recent share repurchase is a strategic financial maneuver that directly impacts shareholder value. By reducing the number of shares outstanding, the company is effectively increasing the earnings per share (EPS), which could lead to a higher stock price assuming the price-to-earnings (P/E) ratio remains constant. The repurchase also signals to the market that the company's leadership believes the stock is undervalued, which can be a positive signal to investors. However, it's important to assess the opportunity cost of this buyback, as the funds used could have been allocated to R&D or other growth initiatives. Investors should consider the company's long-term growth prospects in conjunction with this buyback activity when evaluating the stock.
The semiconductor industry is characterized by cyclical demand and high capital intensity. The timing of STMicroelectronics' share repurchase may be influenced by its current cash position and the cyclical nature of the industry. A buyback during a period of strong financial performance could be a strategic move to invest in the company itself when alternative investment opportunities are not as attractive. Furthermore, the repurchase could be a response to the competitive dynamics within the semiconductor industry, where consolidation and scale are increasingly important. The repurchase program's impact on the company's market capitalization and liquidity should be monitored, as it may affect the stock's volatility and the company's ability to respond to market changes.
The share repurchase program of STMicroelectronics complies with the Market Abuse Regulation, indicating due diligence and adherence to legal frameworks governing financial transactions. The disclosure of detailed transaction data reflects transparency, which is critical in maintaining investor trust. It is also significant that the shares repurchased may be used to meet obligations from debt financial instruments exchangeable into equity, which could potentially dilute existing shareholders if not managed properly. The legal structure of these transactions should be carefully analyzed to understand any future implications for shareholder equity and company governance.
STMicroelectronics Announces Status of
Common Share Repurchase Program
Disclosure of Transactions in Own Shares – Period from Jan 29, 2024 to Feb 02, 2024
AMSTERDAM – February 5, 2024 -- STMicroelectronics N.V. (the “Company” or “STMicroelectronics”), a global semiconductor leader serving customers across the spectrum of electronics applications, announces full details of its common share repurchase program (the “Program”) disclosed via a press release dated July 1, 2021. The Program was approved by a shareholder resolution dated May 27, 2021 and by the supervisory board.
STMicroelectronics N.V. (registered with the trade register under number 33194537) (LEI: 213800Z8NOHIKRI42W10) announces the repurchase (by a broker acting for the Company) on the regulated market of Euronext Paris, in the period between Jan 29, 2024 to Feb 02, 2024 (the “Period”), of 222,962 ordinary shares (equal to
The purpose of these transactions under article 5(2) of Regulation (EU) 596/2014 (the Market Abuse Regulation) was to meet obligations arising from debt financial instruments that are exchangeable into equity instruments.
The shares may be held in treasury prior to being used for such purpose and, to the extent that they are not ultimately needed for such purpose, they may be used for any other lawful purpose under article 5(2) of the Market Abuse Regulation.
Below is a summary of the repurchase transactions made in the course of the Period in relation to the ordinary shares of STMicroelectronics (ISIN: NL0000226223), in detailed form.
Transactions in Period
| Dates of transaction | Number of shares purchased | Weighted average purchase price per share (EUR) | Total amount paid (EUR) | Market on which the shares were bought (MIC code) |
| 1/29/2024 | 45,000 | 40.8925 | 1,840,162.50 | XPAR |
| 1/30/2024 | 35,000 | 41.2343 | 1,443,200.50 | XPAR |
| 1/31/2024 | 40,930 | 40.8841 | 1,673,386.21 | XPAR |
| 2/1/2024 | 50,000 | 40.8584 | 2,042,920.00 | XPAR |
| 2/2/2024 | 52,032 | 40.304 | 2,097,097.73 | XPAR |
| Total for Period | 222,962 | 40.7996 | 9,096,766.94 |
Following the share buybacks detailed above, the Company holds in total 9,404,709 treasury shares, which represents approximately
In accordance with Article 5(1)(b) of the Market Abuse Regulation and Article 2(3) of Commission Delegated Regulation (EU) 2016/1052, a full breakdown of the individual trades in the Program are disclosed on the ST website (https://investors.st.com/stock-and-bond-information/share-buyback).
About STMicroelectronics
At ST, we are over 50,000 creators and makers of semiconductor technologies mastering the semiconductor supply chain with state-of-the-art manufacturing facilities. An integrated device manufacturer, we work with more than 200,000 customers and thousands of partners to design and build products, solutions, and ecosystems that address their challenges and opportunities, and the need to support a more sustainable world. Our technologies enable smarter mobility, more efficient power and energy management, and the wide-scale deployment of cloud-connected autonomous things. We are committed to achieving our goal to become carbon neutral on scope 1 and 2 and partially scope 3 by 2027. Further information can be found at www.st.com.
For further information, please contact:
INVESTOR RELATIONS:
Céline Berthier
Group VP, Investor Relations
Tel: +41.22.929.58.12
celine.berthier@st.com
MEDIA RELATIONS:
Alexis Breton
Corporate External Communications
Tel: +33.6.59.16.79.08
alexis.breton@st.com
Attachment
FAQ
What is the purpose of the share repurchase program?
How many shares were repurchased in the period from Jan 29, 2024 to Feb 02, 2024?
What is the weighted average purchase price per share?
How many treasury shares does the Company hold after the share buybacks?
